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Providers utilizing the Hybrid Funding model are comfortable with taking on some of the risk and want to participate in the upside of receiving interest income, while HFD still services the paper.
How it Works
Providers will be advanced a percentage of the total procedure cost up front based on a monthly vintage of overall loan originations. HFD will then retain 100% of monthly payments collected from the consumers until an agreed upon ROI has been met. Once the provider meets the pooled ROI for that month’s vintage, HFD will release 100% of the remaining monthly payments and interest (minus servicing fees), as they are collected from the consumer to the provider.
Example:
Based on Monthly Vintage – Pool of accounts originated in a particular month.
FAQ:
| Question | Answer |
| What is the initial advance rate? | This can vary from provider to provider; however, the standard is 30% |
| What is a typical ROI? | The standard ROI is 15%. |
| Can I sell the program now? | The program is not fully market ready as of April 2024. Please await more information from the Revenue/Marketing team. |
| Is there any special configurations that need to be set for Hybrid Pricing in Ops? | Yes, providers utilizing the program will need to have their funding type set to Hybrid in the Ops Portal – Provider Settings. |
| Can the provider choose to be on more than one program? | No, they must choose Hybrid Pricing or Cash Up Front pricing. |
| How is monthly payment funding switched from capital to the provider? | All funding changes are made by the FinOps team. No configurations are needed in the Ops Portal provider settings. |
| How are servicing fees paid? | Servicing fees are deducted from the payment amount. HFD is and the merchant processor are paid prior to the capital partner or provider. |